Career concerns incentives: An experimental test
Holmström's [Holmström, B., 1982/1999. Managerial incentive problems: a dynamic perspective. Review of Economic Studies 66, 169-182. Originally published in: Essays in Economics and Management in Honour of Lars Wahlbeck, Helsinki] career concerns model has become a workhorse for analyzing agency issues in many fields. The underlying signal jamming argument requires players to use information in a Bayesian way, which is difficult to directly test with field data: typically little is known about the information that individuals base their decisions on. Our laboratory experiment provides prima facie evidence: (i) the signal jamming mechanism successfully creates incentives on the labor supply side; (ii) decision errors take time to decrease; (iii) while subjects' average beliefs are remarkably consistent with play, a mild winner's curse arises on the labor demand side.
Year of publication: |
2009
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Authors: | Koch, Alexander K. ; Morgenstern, Albrecht ; Raab, Philippe |
Published in: |
Journal of Economic Behavior & Organization. - Elsevier, ISSN 0167-2681. - Vol. 72.2009, 1, p. 571-588
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Publisher: |
Elsevier |
Keywords: | Incentives Reputation Career concerns Signal Jamming Experiments |
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